TYPES OF COMPANIES
Before describing the different steps required to register a commercial company, allusion should be made to the figure of the national “service agent” (a figure analogous to the agency, called “facilitator” according to the Ministry of Industry and Commerce of Qatar) to the registration of a branch or representative office. This “service agent” facilitates bureaucratic relations with the administration when registering the company (if we have a local partner, in case of setting up a subsidiary, it will usually be him or someone designated by him), and it can also be very useful when obtaining residence permits, driving licenses, telephone, water and electricity connections, etc. and its renovations.
The types of companies attend to their form of incorporation. In Qatar a company can be constituted under four possibilities:
- Representation Office (already analyzed above). It would have representation duties only and does not formally operate as a company.
- Branch or Branch. It is intended to facilitate the creation of a company more quickly and easily only to participate in a project of a public entity.
- Creation of a subsidiary in Qatar under the Joint Venture formula.
- Establishment in Free Trade Zone.
- Creation of a representative office (already analyzed in the previous section)
Creation of a Branch:
This type of foreign investment is reserved for those companies that develop a specific contract for the Government of Qatar or another public entity. Consequently, the branch will only be able to carry out the necessary activities to comply with that contract, not being able to develop any other economic activity or work for the private sector. For this, it must be approved by the Ministry of Commerce, and the corporate figure will be valid for the duration of the project that is developed qualified for the government, for which the Ministry of Commerce understands it legally, as a quasi-governmental entity. In this case, no local partner is required, so the branch may be 100% foreign owned. In principle, the activities of the branch will be subject to Qatari corporation tax, unless they receive a special exception.
Branches are common in sectors such as construction, infrastructure, engineering and other related fields where there are no local companies with experience enough and the government directly grants a public tender to a specific foreign company.
Creation of a joint-venture in Qatar:
This is the creation of a joint venture company with a Qatari company. Normally (in certain cases it is increased to 100% of foreign capital according to Law 1/2019 of foreign capital) it is constituted with 51% of the capital stock of the local company and the remaining 49% of the foreign company. The reality is that the foreign company contributes 100% of the capital stock. It is common for 10% of annual profits to be earmarked for statutory reserves.
Establishment in Free Trade Zone
There are four free zones in Qatar: Qatar Financial Center (QFC), Qatar Scientific and Technological Park (QSTP) and Manateq or Qatar Free Zones Authority (QFZA).
The QFC is a private platform to attract business to the country. At first it was focused on companies in the financial field (banks, consultancies firm, venture capital companies, etc.) and recently it has opened its range to all those companies that do not belong to the industry or that do not manufacture. At this moment, the main sectors that they want to promote are related to sports, fintech, communication, digital, health, transport and tourism.
They offer tax advantages, the possibility of repatriating 100% of profits, 100% of foreign capital, legal advisory services, consulting, etc. Furthermore, the QFC has two branches apart from the business platform:
- Qatar Financial Authority, is an independent regulator of financial services within the QFC, approved for westerners. It serves to establish accounting, transparency and supervision standards that benefit the international recognition of the companies that host it.
- Qatar International and Dispute Resolution Center, which is an arbitration court to easily resolve disputes between companies without having to resort to the ordinary justice that foreign companies fear.
The QSTP is a platform that aims to promote R&D in Qatar. To do this, they offer advisory services for implementation, tax exemptions, help for installation, participation in an incubator and facilitation of agglomeration economies among the rest of the companies that are part of this free zone.
Manateq (since 2018 it is called Qatar Free Zones Authorities, QFZA) is a special economic zone that aims to promote manufacturing and productive diversification of the country. It is made up of two free zones under QFZA, Ras Abu Fontas and Umm Al Houl, located very close to the airport and port, respectively. These economic zones give the companies under their umbrella the following advantages: possibility of establishing themselves with 100% of foreign capital, 20 years of tax exemption, absence of import duties, possibility of Joint Ventures with local companies, total repatriation of capital, qualified workers and progressive visa systems and access to land, transportation and first level offices, among others.
Formalities for a company constitution
It will be necessary to complete the following steps to found a company and obtain the commercial registration:
- Statutes of the company (Memorandum & Articles of Association) in Arabic according to the standards provided by the Ministry of Business and Commerce and that are approved by that same ministry.
- Copies of the statutes of the foreign company notarized, authenticated and with the corresponding consular seal. Likewise, a decision of the board of directors or power of attorney is required authorizing a specific person to establish a company in Qatar.
- Bank certificate from a local bank of the deposit of the capital stock by the representatives of the company. Once the company has been created and the commercial registration carried out, the capital stock may be withdrawn by the representatives of the company for the operation of the company.
- Registration with the Chamber of Commerce of Qatar.
In addition, the following licenses must be obtained:
- Office rental contract.
- Municipal license according to the activity sector.
- Signaling license.
- Immigration cards for workers
Formalities to establish a branch
In the case of branches, there will be required:
- Letter of support from the public entity for which the foreign company is hired.
- Copy of the contract with the corresponding public entity.
- Authorization from the Ministry of Industry and Commerce to establish a branch.
- Copies of the statutes of the foreign company notarized, authenticated and with the corresponding consular seal. Likewise, a decision of the board of directors or power of attorney is required authorizing a specific person to establish a company in Qatar.
- Registration with the Chamber of Commerce of Qatar.
In addition, the following licenses must be obtained:
- Office rental contract.
- Municipal license according to the activity sector.
- Signaling license.
- Immigration cards for workers.